|The stock was just weak all day, for some reason. Since the volume was 25% higher than normal, and since the Nasdaq had the best day its had in probably ten sessions, I would attribute Tuesday's weakness mainly to Banc of America Securities cutting their estimate on Ariba's sales by 20% for the current q.|
Basically, it looks like everyone's deathly afraid that any day now, Ariba mgmt will pre-announce that they blew the quarter badly. Arba exec has previously made nervous comments to the effect that at the end of Feb., they still had to close 65% of the deals for the quarter in order to stay on target for prior sales estimates.
Who knows though. Look at how MANU was off 9% today, after exceeding both sales and earnings estimates. So you never can tell. Did you see this gem below that came onto the wire 25 minutes before the market closed? All you have to do is read through the second paragraph, and then you know why very few people actually invest in utility companies: They ain't too bright.
Utility Pepco Closes Its Online B2B Exchange
NEW YORK (Reuters) - Potomac Electric Power Co. (NYSE:POM - news) said on Tuesday it closed its business-to-business online exchange, citing a lack of demand for the service among its customers and partners.
The company, which provides electricity in the Washington D.C. and Delaware areas, set up the exchange, PepMarket.com, last September as a way of allowing customers to buy goods, such as office supplies and services, over the Internet.
That's all that's worth reading in the article. All I want to know is, which hallucinagenic drug made the executives of Potomac Electric Power Co. think that people would want to buy their office supplies from their electric utility company? Next thing you know, we'll see hospitals closing down their B2B network because of a lack of demand for people wanting to order quote "goods, such as blue jeans and sunglasses, over the Internet" unquote.
I was not aware that Ariba's software solutions are limited in regards to direct procurement (i.e. materials for use in building/mfg whatever it is your company does). I think they probably can and do build such systems, but with the weath of ignorance out there regarding what exactly these companies do.
Here below is yesterday morning's latest customer acquisition by Ariba. I don't see any limitation on direct procurement:
Ariba Powers Private Marketplace for Fortune 100
Pharmaceutical Company To Complement Its Global
Strategic Sourcing Program
Process Cost Savings and Return on Investment Realized Immediately
MOUNTAIN VIEW, Calif., March 27 /PRNewswire/ -- Ariba, Inc. (Nasdaq: ARBA -
news), the global leader in B2B commerce and collaboration, recently developed a Private
Sourcing Exchange for Bristol-Myers Squibb (NYSE: BMY - news), a $20 billion
diversified, global health and personal care company. The Ariba-powered Private Sourcing
Exchange is a robust Internet-based tool for Bristol-Myers Squibb's RFQ-based purchases
for direct and indirect materials, business services, and capital assets. (note: RFQ = Request For Quote. Also, note the capital asset capability.)
One of Bristol-Myers Squibb's key Global Business Services organizations, Global Strategic
Sourcing was established as part of the Productivity for Growth Initiatives in 1996. Global
Strategic Sourcing was created to evaluate the way Bristol-Myers Squibb buys goods and
services and to determine how to add value to the way Bristol-Myers Squibb purchases as
an international company.
Over the past few years Bristol-Myers Squibb had dramatically improved their sourcing
process, but still lacked a tool which would allow them to harness the power of the Internet
to increase the efficiency and effectiveness of their traditional sourcing process. Given Ariba's
market leadership and the strong relationship already in place between the two companies, it
was natural for Bristol-Myers Squibb to turn to Ariba first.
Within six weeks Ariba Sourcing provided Bristol-Myers Squibb with a privately branded,
hosted sourcing platform. Ariba Sourcing not only provides sourcing software functionality,
but also an extensive set of services to ensure supply base liquidity and auction success.
Bristol-Myers Squibb has realized an average additional cost savings of 6-10 percent across
multiple product categories and process savings of over six weeks. Their sourcing
organizations have seen a savings of 4-6 weeks for the time to go through the entire
procurement process. This allows the department to focus on their two primary objectives:
to secure the best total value for goods and services Bristol-Myers Squibb buys as a
worldwide company, and to make the most informed sourcing, negotiating, and purchasing
``Our six week implementation enabled a rapid return on investment for Bristol-Myers Squibb,'' said Mike Hills, vice president, North American operations for Ariba. ``We will continue to work closely with BMS to enable them to roll out the solution across their global organization, with the overall goal to reduce purchasing cycles and costs throughout the company.''
Bristol-Myers Squibb has also accelerated their implementation schedule and plans to implement the Ariba Sourcing Platform in Europe and Latin America in 2001.
Of course, BMY isn't nearly the same thing as a local electric power company trying to hawk paperclips and pens over the internet. And that is why it doesn't bother me to read about some so-called B2B exchange being shut down. There was definitely a gold-rush mentality throughout the economy, with lots of companies headed to "them thar hills" to pan for gold, when they should have known that the odds of hitting the mother lode where stacked against them. Some things truly don't change, regardless of history.
I knew that it was impossible to know where the bottom of a stock is except through hind-sight, and I have no regrets at being in at $10.75. Quite the contrary.